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Xbox's reset puts Halo, Age of Empires and Sea of Thieves under Activision
Microsoft eliminated 268 roles on Tuesday and moved studios under its larger publishers, giving a new Activision team the next Halo while Halo Studios keeps a smaller crew on the games it has already shipped.
The Product Desk · Product desk
What happened
- Activision also takes control of World's Edge and Rare, Bethesda takes Obsidian, King takes Microsoft Casual Games, and Playground and Turn 10 merge into one studio.
- Double Fine, Compulsion and Undead Labs have returned to being independent studios, and Ninja Theory is being closed down after two agreements fell through.
- The statement said the actions completed since July, including studio divestitures, bring Microsoft roughly three-quarters of the way through the restructuring it previously announced.
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Why it matters
- constraint Halo's release schedule now sits with the publisher whose flagship ships every year, and CNET's McAuliffe says that habit applied to a story-focused game may stifle creativity and leave it feeling flat.
- decision Anyone forecasting Xbox's first-party slate has to track publishers now, since three franchise lines moved owner in a single memo.
- exposure Halo Studios keeps only community and live-game support, which leaves its remaining staff working on titles already out with no flagship in development.
Halo: Campaign Evolved shipped earlier in 2026 to critical acclaim, and it is Halo Studios' final release [12]. The studio keeps a smaller team to support the community and the games already out, while the next Halo goes to a dedicated team inside Activision, kept separate from Call of Duty operations [2].
That ordering matters to anyone who has to defend a portfolio plan on Monday. A well-reviewed release did not decide who got the next flagship. The cuts followed Xbox CEO Asha Sharma saying the business "is not healthy" [11], and the July announcement of 3,200 layoffs over the following year was tied to a struggling business and stagnant growth in Game Pass [10]. CNET calls that growth stagnant and gives no subscriber figures [22].
The consolidation follows publishers. Activision also takes World's Edge and Rare, which make Age of Empires and Sea of Thieves [3], leaving it the developer of both Call of Duty and Halo [21]. Bethesda takes Obsidian, which is making the next Fallout [4], and King takes Microsoft Casual Games [5]. Playground and Turn 10 merge into a single studio, putting Forza and Fable together [6]. Double Fine, Compulsion and Undead Labs are independent again [7], and Ninja Theory is closing after two agreements fell through, with Senua still slated for 2027 [8]. Counting the studios and units named in the announcement, eleven change owner, merge, leave or shut [20].
Activision has done the support-publisher job before. It worked on Bungie's Destiny from 2010 until a messy public split in 2019, bringing in outside studios such as Vicarious Visions and High Moon to support PC and speed up new content [13]; Microsoft bought Activision in 2022 [14]. The next Halo now sits inside that setup.
The headcount figure is smaller than the restructuring language around it. Tuesday's statement, titled Continuing Our Reset, eliminated 268 roles across Halo Studios, other first-party studios, and XGS management and central functions [1]. Set against the 3,200 layoffs announced in July, 268 is roughly 8 percent [19]. The statement said "The actions completed since July, inclusive of the studio divestitures, bring us roughly three-quarters of the way through previously announced restructuring" [9]. That fraction counts divestitures alongside cuts, and the statement leaves the 268 and the 3,200 as two separate numbers.
"This feels like the end of an era," said CNET senior writer Zachary McAuliffe [15]. He also said: "Halo is a franchise that is largely synonymous with Xbox as a brand, so Microsoft handing the franchise to Activision feels like the company cutting off its nose to spite its face" [16]. His practical worry is cadence. McAuliffe says Activision habits such as annualized releases, applied to a story-focused game, may stifle creativity and make the games "feel flat" [17].
Anyone consolidating their own product lines can take each line and ask two things: does its value come from a dependable release cadence or from one release being good, and does the receiving org's schedule match that answer. Halo's last game was judged as a one-off. Call of Duty ships annually [17]. All CNET has on the next Halo is that Activision is making it [18].
What to watch
- Whether the dedicated Activision Halo team ships on an annual cadence or a longer one.
- The remaining quarter of the restructuring, and whether more role eliminations follow the 268.
- Whether Ninja Theory's Senua still arrives in 2027 now that the studio is being closed.